h. Amount of Guaranty and Entitlement Use (continued)

Amount

How to calculate the amount of guaranty on an IRRRL

IRRRLsof $45,001 to $56,250

First, calculate the lesser of:

·  $22,500, or

·  The amount of guaranty used on the VA loan being refinanced.

The amount of guaranty is the greater of:

·  The above result, or

·  25 percent of the IRRRL loan amount.

IRRRLsof $56,251 to $144,000

First, calculate the lesser of:

·  40 percent of the IRRRL loan amount, or

·  The amount of guaranty used on the VA loan being refinanced.

The amount of guaranty is the greater of:

·  The above result, or

·  25 percent of the IRRRL loan amount.

IRRRLs greater than $144,000

Guaranty on these is always 25 percent of the IRRRL loan amount.

i. Maximum Loan Term

The maximum loan term is the original term of the VA loan being refinanced plus 10 years, but not to exceed 30 years and 32 days.

For example, if the old loan was made with a 15-year term, the term of the new loan cannot exceed 25 years

j. Title/Lien Requirements

The IRRRL must replace the existing VA loan as the first lien on the same property.

·  Any second lien-holder would have to agree to subordinate.

·  The borrower cannot pay off liens other than the existing VA loan from IRRRL proceeds.

The veteran (or surviving co-obligor spouse) must still own the property.